We wrote a blog article over two years ago addressing re-shoring. Today, people are still buzzing about this topic. While re-shoring is heavily discussed, there hasn’t been a mass movement of production onshore quite yet.
Despite the benefits of re-shoring, it’s a process that doesn’t happen overnight. GM Nameplate knows the importance of being present in both the United States and overseas, with locations in the U.S. as well as Singapore and China. Working with a globally integrated organization gives customers the option to choose whichever type of manufacturing best fits their needs.
As the gap between Chinese and American wages closes, it is likely that more manufacturing will be driven onshore. With steady wage increases overseas, the weakening US dollar, and other factors such as freight and customs duties, Asia isn’t necessarily the cost effective choice anymore. Some of the major benefits to bringing production home include better communication, faster reaction time, and more jobs in the United States. Producing goods onshore can also improve the quality and consistency of production due to more highly regulated procedures. In fact, many highly regulated industries, such as medical and aerospace, require production to take place in the United States to maintain a high level of quality.
Depending on the industry, many companies have begun the process of re-shoring or intend to do so in the near future. While bringing manufacturing onshore makes sense for certain types of production, there is still value in producing overseas. GMN will continue to have a presence overseas to offer its customers multiple solutions for production. The decision on where to manufacture should be analyzed on a product-by-product basis to compare the overall costs, allowing the customer to come to an informed decision. At GMN, we help customers analyze the costs and benefits of each option to reach the best decision.
To learn more about re-shoring read “Coming Home” from Economist.com.